# Is India's growth story in trouble?

The concern is not any single number, it is that several red flags arrived at once. Growth forecasts have been trimmed across the board - Moody's cut FY27 to **6%** (the low-end call), S&P to 6.6% (from 7.1%), ICRA to 6.2%. For an economy that has not contracted in 40+ years (Covid aside), a slide below 4-5% is what a recession feels like.

The stack underneath: **"silent" layoffs in the $283bn IT sector** (~50,000 jobs this year, ~500,000 at risk over 2-3 years, TCS's largest-ever cut) as AI questions the offshore-engineering model - structural, not cyclical. **Foreign portfolio investors turned net sellers** (BofA sees the selloff extending into 2027-28), though FDI held at +$7.7B. Wholesale inflation (WPI) is at a **13-year high** with retail catch-up the base case. A record merchandise **trade deficit of -$333B**, with China overtaking the US as India's largest trading partner. An oil shock (Delhi petrol Rs 102). And an **El Nino monsoon at 90% of normal**, the driest in 11 years, that none of the GDP cuts priced in. Uday Kotak: "it's coming, and it's coming big."

Series live on [https://www.tigzig.com/tremor](https://www.tigzig.com/tremor) (India WPI, trade balance, oil). Full 13-slide analysis: [https://www.tigzig.com/post/india-economy-red-flag-may2026](https://www.tigzig.com/post/india-economy-red-flag-may2026). The one bright spot (AI data centers): [https://www.tigzig.com/agents-faq/is-india-becoming-a-global-ai-data-center-hub](https://www.tigzig.com/agents-faq/is-india-becoming-a-global-ai-data-center-hub).

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Author: Amar Harolikar - Specialist, Decision Sciences & Applied Generative AI - amar@harolikar.com - https://www.linkedin.com/in/amarharolikar
Source: https://www.tigzig.com/agents-faq/is-india-growth-story-in-trouble
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